No my point is that the economy continually adapts and has been doing so since the industrial revolution.
OK, it "adapts", as you put it. But accommodating 10%, 25%, or 50% unemployment, is [i]adapting.[/i] You seemed to be suggesting that the labour market would adapt in an altruistic or benevolent way. That's not what markets are about, far from it. Nor is there any evidence that the market has any sort of inbuilt self-preservation mechanism that protects it, which again seems to be what you are suggesting by claiming that it adapts.
Awesome, can't wait. So glad I've brought children into this world...
I'm actually quite optimistic, because I believe that people will adapt - not the markets. I think new methods of less labour intensive production should be embraced, but for the benefit of all, not the few. It will release people to engage in other socially useful tasks but which don't necessarily create an easily identifiable material profit. Necessity forces humans to adapt, and they will imo.
There's a billion people in China who just ten years ago were mostly growing rice in the back of beyond,
oldnpastit--- do you teach in a private school ?
I like your optimism ernie, I don't share it though.:(
You seemed to be suggesting that the labour market would adapt in an altruistic or benevolent way.
No, not at all. Markets can never be benevolent, can they? Surely they're completely amoral, which is their problem.
All I'm saying is that historically, people have always found something else to do when their jobs are replaced by machines. Whether or not that's a good thing is another debate, but It's been happening.
I think that, rather than machines freeing up our leisure time, they've actually freed us up (collecively) to start other businesses to make more money, and employ other people who are also freed from menial labour.
I think that, rather than machines freeing up our leisure time, they've actually freed us up (collecively) to start other businesses to make more money, and employ other people who are also freed from menial labour.
are you serious--so the global downturn is not happening ?-- more under/unemployed than ever in uk --
are you serious--so the global downturn is not happening ?
Sigh.. I'm talking about mechanisation in general. It's been going on a lot longer than 2008 hasn't it?
Are you trying to say that the global downturn is a result of mechanisation?
I think that, rather than machines freeing up our leisure time, they've actually freed us up (collecively) to start other businesses to make more money, and employ other people who are also freed from menial labour.
I understand what you're saying, but the majority of those businesses seem to be coffee shops, baby clothing shops, and beauty salons.
The [i]quality[/i] of the jobs, and working conditions, have deteriorated for many .
I've asked this often and never had a decent answer.
Exactly why are baby clothing shops, beauty salons and coffee shops bad?
Coffee shops only exist because lots of people have the means to buy coffee and the time to drink it.
You might hark back to manufacturing as being somehow more worthy than coffee shops, but a large part of manufacturing is making total shite that no-one needs. The only difference is that you drink coffee rather than look at it or give it to people. And it doesn't end up in landfill either.
All I'm saying is that historically, people have always found something else to do when their jobs are replaced by machines.
Exactly! Ultimately we'll all end up working for a coffee franchise, selling each other overpriced lattes while we sit designing Apps on a Macbook Pro, and experimenting with elaborate facial hair. This already accounts for 92% of the entire British economy. The other 8% being Tesco
China is a good example since liberalisation of the Chinese economy has lifted significant numbers out of poverty, raised education standards and created many new opportunities. As always this has not been cost-free and the externalities associated with market economies have also been apparent (eg pollution etc). However, the key point is that China's future economic success is based on its ability to transform itself from an investment-led economy to more of a consumer driven one. Quite to opposite of the trends in the developed world where we have excess consumption driven by excess borrowing and insufficient consumption. China is not finding this transformation easy and nor are we!
Are you trying to say that the global downturn is a result of mechanisation?
It's certainly possible that we've reached a tipping point, isn't it? And even if not the main cause, I think it would be very difficult to exclude it as a factor. It seems that everything pre 2008 was based on now understood to be unrealistic expectations of continual growth to fuel the economy.
It's certainly possible that we've reached a tipping point, isn't it?
Well, I'm not an economist, but it may well be that we've just shifted the profile of our manufacturing to different countries. So we get to do all the service industry stuff, and someone else ends up making the shite. The tipping point may well come when there are no more poor countries left. But is that possible?
PS previous post edited.
V8ninety, do you think people have got to the point of questioning the "growth notion?" Its an interesting idea, but I am not sure it has been accepted.
Can you imagine Osborne standing up and saying, "look, there isn't going to be any real growth for some considerable time while we work through this excess leverage. Old Ed is correct, flatlining is the best we can hope for over the next 5-10 years (let's hope we are not another Japan, then it's 20 years of dealing with excess leverage). But let's be happy and accept this new paradigm of lower/no growth and the benefits that brings to all of us and the environment. "
That would be quite some manifesto comment! In the meantime I would expect any government to face flack for not pulling the growth rabbit out of the hat.
What's 'excess leverage'?
Sorry, economists BS! In proper English, I mean too much borrowing.
When applied to banks, corporates and countries people tend to use leverage rather than borrowing. Banks in particularly use borrowing to leverage their equity capital and grow their assets. In Europe, for various reasons, this remains at unsustainably high levels and needs to be reversed (and is being) which is one reason why monetary policy solutions are having such limited effect on the real economy.
But this is the crux of the problem. We have the hangover from too much borrowing by states, banks, corporate and households. And there is no instant cure. As I have suggested on other threads different people have tried different solutions in terms of the policy mix to solve the levels of debt, but the rabbit remains elusive!
So what's wrong with flat growth, if we have flat population?
Is it that we have to actually repay our debts properly rather than letting them shrink as a proportion of GDP?
Partly thats true. But the current solution is the tried and tested one from the 40-60s period. It's called stealing, sorry, financial repression, which is another BS term designed to hide the fact that returns (interest rates) will be deliberately kept below inflation/growth in order to reduce the level of debt over time. *
Savers are deliberately denied the returns they should receive in order to bail out debtors. It doesn't pay (in many senses) to have been prudent!
* edit: for me, at least (!!) it was interesting that at the IMF meetings over the weekend, the questions over the risks associated with Quantitaive Easing (hidden stealing, manipulation of rates below their required level etc) where being debated more openly.
So if we can take the pain for 5-10 years, then what? Will we be able to continue to grow with less debt?
Lets hope so!
But remember, all the austerity in the UK is not paying down the debt, it is merely slowing (? In theory?) it's growth. Households have done little so far to pay down their debt levels and it's been a mixed picture for the banks. They have found it harder to raise equity, so they have tackled "excess leverage" (sorry!) by shrinking their balance sheets. This is one reason why Osborne is on the wrong track. It is almost impossible to rely on monetary policy while insisting that banks reduce their levels of leverage. These are incompatible objectives. One has to give (and it's actually the regulation of banks at the moment in terms of severity and timing of new regulation being adjusted).
V8ninety, do you think people have got to the point of questioning the "growth notion?" Its an interesting idea, but I am not sure it has been accepted.
To me its less of an interesting idea, more a blazingly obvious fact. If it hasn't been accepted, its because its incredibly unpalatable, rather than not true. I'm no economist, just an averagely intelligent bloke who questions stuff that he hears. But I find it really difficult to understand how, in a world with finite space and resources and an ever increasing population to feed, that the 'relentless growth' theory has EVER been plausible. I always kind of assumed that it was a convenient mistruth, an easy way to justify the excesses of the present, whilst actually leaving a socioeconomic time bomb for our children to deal with. I had always assumed that we wouldn't see the fall out till much later though. But this might be the start of it.
THNM-- as you say, they talked more openly about the 'risks' of QE, its funny how most of the time they like to obfuscate their real agenda with BS designed to confuse, in reality its a fixed market trying to stay one step ahead of it all unravelling....
It was ever thus, rudebwoy!! I am glad we agree that it is a fixed, not a free market!! 😉
V8ninety, yes very interesting points. I wasnt disagreeing with them, only questioning how widely the "obvious fact" has been accepted.
Anyway, little window of opportunity for a ride now. So I will leave you to it. Interesting idea to think about though!
I'm sorry THM, that's simply not on. Not only was your last post reasonable and congenial, you stated that my posts were 'interesting' and that you 'weren't disagreeing'?!?! to top it all, you also actually went out for a ride. What were you thinking man?? THIS IS STW!!!
Therefore, post BLOODY WELL reported.
😉
And to make matters worse, 20 degrees, dusty trails, generally empty and great new trails at Swinley!!!! Dream day.
